NYT

February 11, 2001

Chasing Mexico's Dream Into Squalor (Part I)

By GINGER THOMPSON

Part II

Good wages in maquiladora plants draw
many into border cities. In Ciudad Juarez,
workers assemble car parts.

CIUDAD JUÁREZ, Mexico
— Often looking as if he
had slept in his clothes, Salvador
Durón does not cut the most
distinguished figure. But even with
his gray stubble and grease-stained
fingers, he is welcomed like a king
into the shantytowns at the edge of
this teeming city on the border with
the United States.

Mr. Durón is the water man.

Maneuvering his 15-ton tanker up
jagged mesas and down narrow
ravines, he delivers water to
people the city cannot afford to
supply. He is an everyday hero to
those who live in the cardboard
shacks beneath the broiling border
sun.

To the local government, he is a
crucial part of the struggle to
absorb the tidal wave of workers
drawn here each week by
increased trade between the
United States and Mexico. In the
last five years more than one
million Mexicans have moved to
the border. Many come not to
cross the border but to work in
thousands of mostly
foreign-owned manufacturing
plants, known as maquiladoras.

The factories sprouted in the
mid-1960's, when Mexico and the
United States began an
industrialization program along
their border to ease chronic
unemployment in Mexico. Then
with the North American Free
Trade Agreement came even more
jobs, more shantytowns — and
more demand for Mr. Durón.

Most days, he feels as if he cannot
keep up. Parking his truck atop a
ridge that a year ago was the end
of his route, Mr. Durón pointed to
hundreds of new shacks reaching
out toward the horizon. A mother
and three small children emerged
from one of the hovels and waved
desperately for him to bring water
their way.

"The city keeps getting bigger and
bigger," he said. "There's no way
to get water to everyone who
needs it."

Ciudad Juárez, whose people he
tries to supply, is only one dot in a
rash of overflowing cities and
towns from Tijuana to Matamoros.
Hundreds of the world's wealthiest
companies — Alcoa, Delphi
Automotive Systems, General
Electric and others — have set up
manufacturing plants south of the
border, drawn by lucrative tax
breaks and cheap labor. While factories pay nearly triple the Mexican
minimum wage — about $4 a day — workers here make in a day less
than their American counterparts earn in an hour.

Christ Chavez for The New York Times
AWAITING THE WATER MAN
In Anapra, near the border, workers lack
basics like running water.

The explosion has created one of the most dynamic industrial zones in the
Americas — and all of the problems associated with explosive growth.
The overwhelmed Mexican border cities lack the means to provide the
most basic services. One of the country's powerful drug cartels holds
sway here in Juárez and drug-related crime is common. Dozens of
women who have come to work in the maquiladoras have been
abducted, tortured, raped and murdered, their bodies tossed like
garbage in the desert.

All along the border, the land, the water and the air are thick with
industrial and human waste. The National Water Commission reports that
the towns and cities, strapped for funds, can adequately treat less than 35
percent of the sewage generated daily. About 12 percent of the people
living on the border have no reliable access to clean water. Nearly a third
live in homes that are not connected to sewage systems. Only about half
the streets are paved.

Mirror images of these communities dot parts of the Texas side of the
line. Last year the third world conditions became an issue in the
presidential race between Al Gore and George W. Bush. Democrats
accused the Texas governor of ignoring 400,000 people who live in more
than 1,400 unincorporated encampments, or colonias. Mr. Bush lashed
back, saying that he and his supporters had done more to bring water,
sewage and sanitation services to people than any previous
administration.

The new Mexican president, Vicente Fox, has pledged to pump more
money into the border region and to lure more workers to Mexico's
south. A range of border issues are likely to be raised on Feb. 16 when
President Bush visits Mr. Fox's ranch. One of the most pressing crises,
officials on both sides agree, is water.

Christ Chávez for The New York Times
UNCERTAIN LIGHT
In Juárez classrooms without electricity,
reading can be hard.

Mexican officials worry that American proposals to send more water to
California from the Colorado River could create even more severe water
shortages for farms on the Mexican side of the border.

Ciudad Juárez, which grows by about 50,000 people a year, is running
out of water. The underground aquifer the city relies on has declined by
about five feet a year. At that rate, officials estimate, there will be no
usable water left in 20 years. Levels in many of the city's wells are so low
that they have collapsed.

"The reality of Juárez is the reality of the whole border," said Gustavo
Elizondo, the mayor of Juárez. "You have a city that produces great
wealth, but that sits in the eye of a storm. In one way it is a place of
opportunity for the international community. But we have no way to
provide water, sewage and sanitation for all the people who come to
work.

"Every year we get poorer and poorer," he added, "even though we
create more and more wealth."

Jim Perry/NYT

Beyond Her Dreams: $10 a Day

Last fall, Nora Lydia Urias Pérez, a 29-year-old single mother, arrived in
Nogales, a border city about 60 miles south of Tucson, with humble
aspirations: a job with steady pay and benefits.

A native of the Gulf Coast state of Veracruz, Ms. Urias tried to support
herself and her daughter there by working seasonal farm jobs. But on $5
a day, she found it harder and harder to pay for basic necessities.

Within a week she was hired at a small maquiladora (pronounced
mah-kee-lah-DOH-rah) assembly line that produced staplers for the
Swingline stapler plant, which had been situated in Long Island City,
Queens. Her salary exceeded her dreams, she said. It was almost $10 a
day.

Her biggest challenge was finding a place to live. She had considered
sharing an apartment with 10 others, she said. But she did not want to
pay rent, so she decided to move instead to a shanty community outside
of town.

With only a pocketknife and their strong arms, she and her father cleared
the brush and boulders from a small patch of land in the tumbledown
barrio. All around them were hundreds of dwellings in various stages of
completion. The best ones, usually inhabited by families who had worked
long enough to save money for conventional building materials, were
simple structures with walls of concrete block and tin roofs. The newest
arrivals built flimsier homes, patched together from crates, old tires and
cardboard.

None of the dwellings had running water. None were connected to city
sewage lines. Hundreds of improvised electricity wires crisscrossed the
dirt roads. The air was filled with the smells of human waste and burning
garbage.

But to Ms. Urias, a slender woman with a boyish haircut, it seemed a
promised land. She aimed to build a one-room house out of concrete
there, something small, but sturdy enough for her 5-year-old daughter to
feel comfortable and safe.

In time, she plans to add on. She and her neighbors will one day have
safe drinking water and plumbing. And they will, she hopes, win title to
the land they have settled. But for now, it was enough for Ms. Urias that
she would have a place of her own and a job that paid her year round.

"I am not saying that it will be easy to start life here," she acknowledged,
stopping her work to gaze around the shabby community. "But at least
there is a chance that things for me will get better. There was no chance
of that in Veracruz. I had no hope."

Tens of thousands of workers who come to the border each year cling to
the same hope. They spend their days working at some of the most
advanced factories in the country, churning out products for dozens of
Fortune 500 companies.

And at night, often with only the mildest complaints, they live in squalor.
According to a national survey, more than half of the families in Tijuana
live below the poverty line, and only 5 percent of all families are able to
meet their basic needs without difficulty.

Some of the workers' hideous settlements are in the shadow of the
modern factories. Less than a few miles away from a maquiladora park
that towers over the east side of Juárez, children attend classes in old
school buses that feel like ovens under the desert sun. The community
was connected to the city water system last year but residents still had no
plumbing. City officials say that a school will be completed sometime this
year.

On the west side of Juárez, in a workers' settlement called Anapra that
was established almost 20 years ago, residents still do not have running
water and indoor plumbing. They wait for the water man.

"He is one of my favorite people in the world," grinned 36-year-old
María Elena Beltrán de Medina, speaking of Mr. Durón. Mrs. Medina,
whose husband drives a bus that carries maquiladora workers to their
jobs, said she was learning to make do with the couple of barrels of
water Mr. Durón delivered to her house each week.

She and her children take baths together, twice a week. She uses the
same bucket of water to wash laundry and water her cucumber and
tomato plants. She drinks one glass of water a day and tries to give her
children as much as they want, within reason.

"Right now it's cooler, so they do not get as thirsty," she said. "But in the
summer, they need a lot of water. And there is not always enough."

All Those Jobs Can Be Deceptive

With 1.3 million residents, Ciudad Juárez stands like Goliath next to its
American neighbor, El Paso, which has a population of a little more than
700,000. Set on the Rio Grande at the point where Mexico touches
Texas and New Mexico, Juárez is a metropolis racked by drug-related
crime. And the increased presence of the United States Border Patrol
often makes the bridges that connect the two cities feel like hostile
militarized zones.

Juárez is also an economic powerhouse, the seventh largest city in
Mexico with one of the strongest local economies. There are nearly 300
maquiladoras here. Mayor Elizondo said that last year an average of two
new plants opened each month, generating 40,000 new jobs. The term
maquiladora comes from the Mexican colonial term maquila, which was
the fee millers charged to grind corn into meal. The modern version
allowed manufacturers to import raw materials duty free, process them
into fully or partially assembled goods and ship them back to the United
States.

As Juárez helps drive an economic boom in northern Mexico, El Paso
lags as an emblem of the persistent poverty that has dogged American
cities across the divide. El Paso has lost more than 10,000 manufacturing
jobs since Nafta took effect on Jan. 1, 1994. Some were lost when
several apparel factories closed because of declining profits, said Thomas
M. Fullerton, a border scholar at the University of Texas at El Paso.
Others were relocated to Mexico, he said.

Professor Fullerton said that per capita income in El Paso, about
$17,000, is only 60 percent of the average income in the United States.
And, he said, the 9 percent unemployment rate is about twice the
average unemployment rate in Texas.

It is a similar story in most of the major twin cities that straddle the
border. Six of the 15 poorest metropolitan areas in the United States —
El Paso, McAllen, Laredo, Brownsville, all in Texas, as well as Las
Cruces, N.M., and Yuma, Ariz. — are on the border with Mexico.

"They are regions that have been poor for decades," said James T.
Peach, an economist at New Mexico State University. "The expectations
were that Nafta would change all of that due to increased trade
opportunities. That turned out to be a false hope."

Juárez's robust economic indicators are deceiving, said Mayor Elizondo,
who considers his city more of a poor country cousin to El Paso.

In 1999, he said, Juárez generated $1.4 billion in direct federal taxes, but
its $120 million budget last year was about a quarter of El Paso's
operating budget. And Juárez's population is almost twice that of El
Paso. In fact, according to city officials, Juárez's budget last year was
only slightly larger than the budget for the El Paso Police Department.

Like other mayors of Mexican border cities, Juárez's mayor complained
that his city did not get a fair share of the wealth it generated. The mayors
are urging President Fox to pursue fiscal reforms so that they will get
more money for the infrastructure demands of their growing populations.
And quietly, they are discussing ways to get maquiladora operators to
cover the costs of roads, water and sewage treatment.

Humberto Inzunza, former president of a maquiladora owners'
association, said that last year maquiladora revenues were about $16
billion. The companies, he said, paid an estimated $400 million in
corporate income taxes to Mexico, an amount equal to about 2.5 percent
of their revenues. They paid another $1.3 billion in social security taxes
last year, for some 1.3 million workers. The factories did not have to pay
duty on the raw materials they brought into Mexico, nor on the finished
products they shipped back to the United States.

That has slowly begun to change, said John Christman, an economic
consultant in Mexico City at Maquiladora Industries Service of
Ciemex-Wefa. Under a Nafta provision that took effect last month,
maquiladora operators are required to pay taxes on machines and
equipment that they import for their Mexican plants. And, he said,
companies that use raw materials from non-Nafta nations would be
charged duties when they export their products back to the United
States.

Many of the maquiladoras make annual "contributions" to their local
governments to help pay for important projects. In Juárez, maquiladora
operators contribute an average of $15 per employee, almost $1.5
million a year.

"It's better than nothing, but really what they give is a minuscule part of all
the money they are able to make by having their factories in Mexico,"
Mr. Elizondo said. "What the maquilas provide to Mexico are jobs. And
that is good. It is very good. But it is not enough."

Maquiladora managers disagree. Michael Hissam, the spokesman for
Delphi Automotive Systems in Mexico, said the company, the world's
largest auto parts maker, operates about 18 plants in Juárez alone and
dozens of other plants from Querétaro to Matamoros. Last year, he said,
the company paid $37 million in income and payroll taxes. And in Juárez,
Delphi gave a $300,000 contribution to the local maquiladora association
for infrastructure improvements.

All of the company's plants have full medical facilities, recycling programs
and rigorous safety programs, Mr. Hissam said. And many of the plants
provide transportation for their workers. Four years ago Delphi began a
cooperative program with the Mexican government, and a private home
building company to help assembly-line workers with at least one year of
seniority buy homes. The program, Mr. Hissam said, has not only helped
the company lower turnover rates — which can exceed more than 100
percent a year — it also allowed Delphi to assist almost 3,000 of its
18,000 workers in Juárez move into decent homes.

The dwellings are typically 1,000-square-feet units with one to two
bedrooms.

"We feel we have been paying our fair share for a long time," Mr. Hissam
said. Referring to Juárez, he added, "This is our city, too, and we want to
do for our city the best we can."

Mixed Results, Unmet Promises

Experts estimate that it will take nearly $20 billion to meet the
infrastructure needs of the border population. Under intense pressure
from environmental groups, the United States and Mexican governments
agreed to provide a small chunk of those funds through a development
bank that was established in a side accord to Nafta. The North American
Development Bank was set up to lend to local border agencies for
water-related projects, including treatment plants and sewer systems.

Without doubt, the bank projects have made a difference. Earlier this
year, Juárez opened its first waste water treatment plant to help
decontaminate 75 million gallons of sewage dumped daily into the Rio
Grande. In Reynosa, the bank is helping finance a sewage system,
because most of the old one had worn away, leaving muddy veins instead
of pipes. And it helped pay for workshops for Mexican utility managers,
whose overburdened agencies often use outdated systems and have no
reliable ways to deliver services nor to collect fees from consumers.

In all, the agency, which is jointly financed by the Mexican and United
States governments, has provided about $277 million for 32 projects
along the border over the last four years. But it had promised much
more. The goal was to make almost $3 billion in loans to pay for water
projects on the border. But so far, it has operated more like a
philanthropic organization than a bank. Less than 5 percent of the bank's
loan money has been used.

Suzanne Gallagher, the director of project administration at the bank,
said that many municipal agencies along the border are not able to obtain
the kinds of loans they need to fix their enormous infrastructure problems.
So most of the bank's participation in projects has come in the form of
grants from the United States Environmental Protection Agency.

Leaders of environmental groups who had warily supported Nafta
because they believed in the promises of the bank have been
disappointed.

"The challenges are still there," said Jake Caldwell, a policy specialist at
the National Wildlife Federation. "The results have been mixed."

Reflecting his commitment to addressing the crisis, Mr. Fox appointed
Ernesto Ruffo, a former border state governor as czar of the border. In
an interview, Mr. Ruffo said that the Fox administration was exploring
ways to attract foreign investment and secure loans for infrastructure
projects.

Before he was inaugurated in December, Mr. Fox met with directors at
at the North American Development Bank and backed the idea of
expanding the agency's role in a wider range of projects. Mr. Fox has
also said that he would support changes to make it easier for
municipalities to qualify for loans.

Mr. Ruffo said that the new president would look for ways to increase
taxes on maquiladoras to help pay for employee housing programs.

"Our people will have houses that are small but honorable," Mr. Ruffo
said. "And we are going to ask companies to collaborate on the costs of
these houses because they have seen that Mexican workers are
responsible, and loyal and want to learn more. But they cannot learn and
grow unless they have stable living conditions."

That kind of talk, said Mr. Christman, the economic consultant, has made
maquiladora managers very nervous.

"I think you will see a slowdown in the growth of the maquiladora
industry until we see how big the increases will be," he said.

Mr. Ruffo seemed aware of those concerns. "We do not want to raise
tariffs to the point that companies decide to leave Mexico," he said, "but
we also have to find ways to finance the construction of sufficient
infrastructure."

However, he and other border experts agreed that money was not the
most important part of the solution. Any improvements would not last
beyond the next decade, border officials have said, if growth continues at
the current pace.

"We can keep pouring more money into the border," said Gina Weber,
the United States-Mexico coordinator for the E.P.A. "But if people come
at the rate that demographers are forecasting, we will never be able to fix
all the problems."

Part II